Interview With DomainBits by DomainMagnate

DomainMagnate.com presents an interview with Jeff from DomainBits.com

Details about yourself, occupation, age, location.

Hi Michael! Thanks for the interview. I’m in my late 30s, and live in Ottawa, Canada, with my wife and 4-year old son. My wife and I work together from home – on domaining as well as marketing and running our websites. I also write the blog DomainBits and write for DomainNews. I really like domaining as I like to do things my way, and domaining has no paths that you need to follow – you create your own path and your own success. Staying in my pyjamas all day, being around for my son when he’s not in school, and making good money are all good perks too!

What is your primary focus, e.g. generics, country tlds, short domains etc?

I think that for people who are newer to the industry, there are lots of good opportunities in ccTLDs. These domains are much cheaper than .com domains, and there is solid end user money coming into these extensions to ensure that they continue to do well in the long haul and are not simply speculative bubbles.

So, I concentrate on ccTLDs. I particularly concentrate on UK, Canadian and Indian domains. I’ve found .uk is a particularly strong ccTLD, and my .uk domains do well in terms of type-in traffic and end user offers. I’m in Canada, so I understand the local business climate well, and so I invest in .ca for that reason. I like .in and .co.in for the long term, as India is a huge market whose primary language is English and where there is still going to be a large movement to the internet by both consumers and businesses.

I like to buy domains in those extensions where I can easily picture what will be sold if the domain gets developed. Usually, this is a product or a service type domain, but could also be an informational portal about a profession, health condition, educational opportunities, and so on. I particularly like to buy domains that I could profitably develop if I wanted to – that way, even if no one shares my vision for the domain, I can still make money on it.

I think that investing in “brandable” domains is usually a waste of money.

I also do think short domains are worthwhile, and if I can get a good deal on one, I’ll buy. It’s not something I really concentrate on, but there are certainly a lot of opportunities there.

What is your main domaining strategy: waiting for end users, fishing for bargains to resell to other domainers, investing long term, developing etc.?

I’m a fan of Warren Buffet, who said: “our favourite holding period is forever.” While I do regularly sell a small portion of my portfolio, most of the domains I’m buying are long-term holds.

But I do a bit of everything, really. I have several “piles” of domains. The domains in one pile I would never sell, regardless of the price offered, unless it was really crazy money. Another pile of domains I actively try to sell. Another pile is domains I want to develop. Then another pile contains domains that I would sell to an end user.

I also regularly register new domains – I think that, at least in the ccTLDs, there are still a lot of good unregistered domains.

What was your biggest success in domaining?

Really, I think that anyone who is into domaining at a serious level, whether part time or full time, can already be considered successful. Over the long term, the domain market is going to continue to do extremely well, and so most people in the market will do well. So, in a way, opening up my eyes about the potential of domains and getting into the domaining industry was my biggest success.

On an financial level, I managed to pick up a good CVCV.com for a nominal amount and then re-sell it for low $x,xxx some weeks later. Also, many times I’ve been able to re-sell new registrations a few months later for mid $xxx to low $x,xxx.

Do you have any domaining icons that inspire you and that you look up to?

The one thing I’ve really been impressed with in the domaining industry is that a lot of the top people are amazingly accessible, and I can say that many of them have taken the trouble to answer questions I’ve asked. That has helped a lot in getting me where I am today. Also, I read pretty much all of the domaining blogs out there. I’m thankful to all the bloggers who take the time and energy to share what they have learnt.

Probably the person I look up to the most is Paul Cotton – safesys at DomainState. I think that the hardest part of domaining is getting a good handle on domain values. Paul has taken the time to appraise more domains than anyone else I know. He answers newbie questions and always has insightful contributions to any topic being discussed. And despite his incredible success, he is very down to earth and modest – personal characteristics that are very important to me.

What do you think will happen with the domaining industry in the years to come?

There are going to be more and more extensions coming out – this is going to have the effect of marginalizing a lot of the weaker namespaces. I think that Dot Mobi will crash and burn.

I think that the number of people in the industry is going to increase dramatically. If domains manage to weather current economic storms better than other asset classes, people are going to notice that and flock to the industry. At the same time, I think that the big players are going to get bigger.

I think that as the industry matures, domains will appreciate in value less quickly than they have in the past. This doesn’t mean that there will be less opportunities – just that people will need to be more creative about how to do well in the industry. It won’t be as simple as buying a domain, holding onto it for 5 years, and making a crazy profit – which is how I think a lot of the most successful domainers got where they are today. You’ll need to have more sophisticated strategies than that to be successful.

What would you recommend to newcomers?

As they say, knowledge is power. Spend a lot of time reading domaining blogs and forums before dipping your toes into the market. There is a wealth of knowledge there, but of course, take everything you read with a grain of salt.

I’ve also found that having a background in SEO helped tremendously in understanding what works on the web and what doesn’t, what makes business sense, what the profitability is of various industries, and so on. Learning a bit about this is helpful too.

Learning a bit about investing in general is helpful. I’m a Warren Buffet fanboy, personally, but seeing what successful investors do in general, outside of the domain industry, can be helpful too.

At the end of the day, as a domainer, you are mostly relying on your own decision making ability. You are going to need to make a lot of decisions as a domainer, and you’ve got to have the background knowledge so that you can make the right decisions more often than you make the wrong ones.

Also, having a positive mindset and a “can do” attitude is essential. You aren’t going to get far in domaining without this.

If you had to start it all over again what would you change in your current domain portfolio/strategy?

That’s hard to say exactly, because if I hadn’t made all the mistakes I did make, I probably wouldn’t have learnt a lot of what I know now. Looking back, I probably would have focussed on particular niches a lot more. When I started, I would pretty much dabble in anything, as long as I thought I could get a good deal. That’s spreading yourself very thin. I think you can do better by becoming an expert at some niche and really concentrating on it.

If you were able to go 15 years back in time and register 5 .com domains when they were all available, what would be on your list?

Heh, I wouldn’t stop at 5 – I’d back up the truck and load in as many as I could afford, and then some more! Not the most profitable, but it would be cool to own my FirstName.com and LastName.com. For the remaining 3, I’d probably pick up one word Geo .com’s – as unlike a lot of the domains that have sold for $1 Million or more, I know I’d be able to develop a successful website on the domain if I wanted to.